TaxTMI 
TaxTMI 
2015 (1) TMI 824
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....es that the Court should consider the following substantial question of law: "1. Whether the Hon'ble ITAT is correct in confirming the order of Ld. CIT(A) to delete the addition made by the Assessing Officer on account of Royalty paid by the Assessee to its parent Company by treating the same as Capital in nature? 2. Whether the Hon'ble ITAT is correct in deleting the Addition made by the Assessing Officer on Disallowance of the payment made to Denso Haryana for use of the intranet? 3. Whether the Ld. ITAT was correct in deleting the disallowances of Expenditure paid to Denso Corporation, Japan for Technical Services & treating the same as Revenue Expenditure? 4. Whether the Ld, ITAT was correct in allowing the claim mad....
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....gly answered against the revenue and in a negative. Question No.1. 4. The assessee in terms of its arrangement with parent company-Denso Japan had to remit loyalty at different rates. These were sought to be brought to tax on the ground that expenditure was not revenue but it was capital in nature as it would result in enduring benefit. The CIT (Appeals) disagreed and after analyzing the nature of the transaction held that the amounts paid correctly belonged to the revenue stream and for all the previous years the amount was treated as revenue expenditure, i.e. for A.Y. 1988-89 to 1997-98. In a previous year i.e. ITA No. 479/Del./2004 decided by the ITAT on 20.03.2008, it was held after an elaborate analysis of case law and agreement ....
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....ioning the agreement, the A.O. had no material to say that in fact no service was provided by Denso Haryana for this purpose. This question of law is answered against the revenue and in favour of the assessee. Question No.4. 6. This pertains to the amounts paid as know-how fees by the assessee to Denso Japan. This was for the manufacturing technology, provided by Denso Japan. The ITAT noticed- in this context by its analysis of the findings of the CIT (Appeals)- that up to the period 1998-99, the assessee had claimed the benefit of Section 35AB but thereafter sought to avail provision of Section 31(1). 7. The assessee initially had sought to avail the benefit of Section 35AB. Once the initial period ended in 1988-89, it sought what....
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....d order, the CIT (A) confirmed the action of the Assessing Officer and allowed only depreciation thereof U/S 32(1) which was also accepted. The assessee preferred an appeal before ITAT and the ITAT had allowed the assessee's appeal ' and allowed the said amount in full as revenue expenditure in 1.T.A. No.4714/Del/2004. Thus to the extent, the ground taken by the revenue is misconceived. So far as the ' amount of Rs. 63,.46 Iakhs is concerned, the -same is covered by the order of ITAT in assessee's own case, respectfully following the same to this extent, we do not find any reason to interfere in the order of CIT (A). 16. The first appellate authority followed the order of the Tribunal and in Para 10.6.3 of his order, held....